Companies Named with Tax Agreements in Kankakee, Channahon

(Published: 04-17-2013)

The Regional Transportation Authority (RTA) has today released the names of some of the companies that have or had sales tax rebate agreements with Kankakee or Channahon. These names were discovered through a series of Freedom of Information Act requests, filings with the state and court flings outside of Cook County.

Upwards of 70 or more companies may have entered into sales tax rebate agreements with Kankakee or Channahon. The RTA alleges that many of these businesses have rented office space in these towns to avoid paying higher sales taxes from their actual offices in the six-county RTA region. These small, part-time offices are rarely occupied, but companies claim they make purchases – among their largest expenses – from these offices, so they are taxed at a lower rate.

The RTA, which ensures each public transit agency receives all of the tax funds it is owed, is aggressively investigating these sales tax agreements to determine if they are still being utilized. CTA, Metra and Pace rely on sales tax revenue to fund about half of their annual operating budgets.

Some of the businesses disclosed today utilize the services of tax consultants. In 2011, the RTA filed against Kankakee, Channahon and a number of tax consultants. The lawsuit arises from the utilization of tax sharing agreements which have induced companies operating within the six-county RTA region and across the State to claim that their sales are sourced through offices set up in Kankakee and Channahon which is believed to have resulted in the loss of over a $100 million dollars in lost tax revenue. Under sales tax sharing agreements, the two municipalities have agreed to rebate a high percentage of their local share of the statewide sales tax to the participating companies.

Learn more about the RTA’s lawsuit that led to today’s announcement.

The names of some of those businesses identified as having operated in Kankakee and Channahon are:

AIRLINES

Material Services Co. Inc. - 27734 West Bluegrass Drive, Channahon, IL.
This is a subsidiary of US Airways Group. Material Services offers services in the areas of purchasing, inventory control and fuel procurement and management to airline carriers that operate under agreements with U.S Airways Group Inc. or US Airways, Inc.

Southwest Jet Fuel Company - 27734 West Bluegrass Drive, Channahon, IL
Southwest Airlines operates more than 3,200 flights a day. It has approximately 46,000 employees and serves a combined 97 destinations in 41 states, the District of Columbia, Puerto Rico and six international destinations. Chicago’s Midway Airport has more Southwest Airline daily departures (231) than any airport in the country.

RETAIL

Aldi Investments LLC - 388 E. Court Street, Kankakee, IL 60901
The Aldi group operates over 8,000 stores worldwide. There are over 1,000 ALDI stores in 31 states, from Kansas to the east coast.

Land’s End, Inc. - 388 E. Court Street, Kankakee, IL 60901
Lands’ End offers its products through multiple selling channels. These include its apparel website (landsend.com), catalog mailings, 14 retail stores, and 290 “store within a store” departments in Sears’ retail stores. Within 100 miles of downtown Chicago, there are 14 locations selling Lands’ End merchandise – all of them within the six-county RTA region.

SPS, Inc. (Sears Procurement Services) - 388 E. Court Street, Kankakee, IL 60901
The procurement arm of Sears Holding Corporation with an office in Hoffman Estates, IL. Sears Holding Corporation is a retailer with over 2,600 full-line and specialty stores in the United States and Canada.

Plass Appliance & Furniture, Inc. - 27734 West Bluegrass Drive, Channahon, IL
Founded in 1938, Plass Appliance and Furniture is a family-owned business with more than 100 employees. Plass sells home appliances, electronics and furniture from six showrooms and online. A furniture and appliance company with 7 showrooms spread throughout the Chicago area including locations in Elmhurst, Geneva, Marengo, Naperville, Northbrook, Addison and Arlington Heights.

Target Corporation - Kankakee, IL
There are 97 Target stores in Illinois, the majority of the stores are concentrated in the six-county RTA region. Target is the second largest discount retailer in the U.S.

TECH

AT&T Network Procurement, L.P. - Kankakee, IL
The company is a subsidiary of AT&T, the largest telecommunications company in the U.S. AT&T reported $124 billion in consolidated revenues in 2010. In 2011, AT&T paid $10.2 billion in dividends.

Communications Supply Corporation, Inc. - 27734 West Bluegrass Drive, Channahon, IL
CSC distributes a wide range of data communications and security solutions and is a subsidiary of WESCO. The company has an office in Carol Stream.

Forsythe Technology, Inc. - 27734 West Bluegrass Drive, Channahon, IL
Forsythe Technology is an information technology consulting firm with approximately 900 employees worldwide. In 2006, Forsythe became one of the largest, privately-held, 100-percent ESOP-owned companies in the U.S. Its share price on December 31, 2010 was $52.87.

Compaq Financial Services (Illinois) LLC - 388 Court Street, Kankakee, IL
The company provides products, technologies, software and services to consumers and business worldwide. Compaq was acquired by HP in 2002. Hewlett-Packard has approximately 331,800 employees worldwide. HP is the world's leading PC manufacturer and has been since 2007.

Verizon Wireless Network Procurement LP - 27734 West Bluegrass Drive, Channahon, IL
A subsidiary of Verizon Wireless, the company has the largest nationwide wireless voice and data network and 31.5 million customers. Verizon also serves more than 98 million retail customers nationwide, provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500.

Hill Mechanical Logistics, LLC - 150 N. Schuyler, Kankakee, IL 60901
The company is part of The Hill Group, a large mechanical construction, design, service and operations organization, based in the Chicago area. Hill has been in business for 75 years. It’s headquartered in Franklin Park.

Maron Procurement Company LLC - 27734 West Bluegrass Drive, Channahon, IL
Headquartered in Skokie, the company is an affiliate of Maron Electric Company. Since 1916, the Maron Electric Company has become one of the leading electrical contractors and design/builders in the Midwest and nationally.

VCNA Prairie Inc. - 388 E. Court Street, Kankakee, IL 60901
Prairie Material owns and operates a network of ready-mix concrete plants and aggregate facilities in four Midwest states – Illinois, Indiana, Michigan and Wisconsin. Today, Prairie employs 1,800 professionals in nearly 100 locations in the four state area. Prairie's materials form the core of major structures throughout the Midwest, including Trump Tower Chicago, the Milwaukee Art Museum addition and the Indianapolis International Airport.

MEDICAL SERVICES

Henry Schein Inc. - 150 N. Schuyler, Kankakee, IL 60901
Henry Schein, Inc., a fortune 500 company and a member of the NASDAQ 100 Index It is the world's largest provider of health care products and services to medical, dental, and veterinary office-based practitioners.

PSS World Medical, Inc. - 27754 West Blue Grass Drive, Channahon, IL 60410
PSS World Medical, Inc. is a leading national marketer and distributor of medical supplies and equipment to physicians, elder care and healthcare providers in the U.S. The company also operates the largest distributor of medical supplies to the long-term healthcare and elder care industry.

VHS Chicago Market Procurement LLC - 27734 West Bluegrass Drive, Channahon, IL
It is a company headquartered in Berwyn, Illinois that operates as a subsidiary of Vanguard Health Systems Inc., and acts as its procurement arm for facilities in the Chicago area operated by Vanguard including MacNeal Hospital, Weiss Memorial Hospital, Westlake Hospital and West Suburban Hospital.

UTILITIES

Avalon Petroleum Company - 200 E. Court Street Suite 720 Kankakee, IL 60901
Established in 1925, Avalon Petroleum Company has grown into one of the Midwest's largest independent petroleum distributors. Avalon has supply relationships with every major manufacturer, including BP Amoco, Shell, ExxonMobil, Marathon, and Citgo.

LSP-Kendall Energy, LLC - 150 N. Schuyler, Kankakee, IL 60901
Dynegy Kendall Energy, LLC owns and operates power generation plants. The company was formerly known as LSP-Kendall Energy, LLC and changed its name in May, 2007. The company was incorporated in 1998 and is headquartered in Minooka, Illinois.

The Reynolds & Reynolds Company - 27734 West Blugrass Drive, Channahon, IL
Reynolds and Reynolds delivers the software, business forms and supplies, and professional services that support all areas of automotive retailing for car dealers and automakers.

The Relizon Company d/b/a WorkflowOne LLC - 27734 West Blugrass Drive, Channahon, IL
The company provides a wide range of products and services including business documents, electronic print and mail solutions, branded merchandise, label solutions, sales and marketing collateral, and distribution services.

Press Contact

With three transit systems and more than two million riders a day, there is always something interesting going on at the RTA. Get the latest scoop on everything all in one place. For all media inquiries, please contact Susan Massel, Director of Communications and Public Affairs, at 312-913-3256 or at communications@rtachicago.org.